02 WB-2008 - Strategic Communication For Privatization, PPP & Private Participation in Infrastructure Projects

THE WORLD BANK
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THE WORLD BANK
Daniele Calabrese
W O R L D B A N K W O R K I N G P A P E R N O . 1 3 9
Strategic Communication
for Privatization, Public-
Private Partnerships, and
Private Participation in
Infrastructure Projects
Strategic Communication for Privatization, Public-Private
Partnerships, and Private Participation in Infrastructure Projects is
part of the World Bank Working Paper series. These papers are
published to communicate the results of the Banks ongoing
research and to stimulate public discussion.
This publication is the eighth in a series of Working Papers
sponsored by the Development Communication Division
(DevComm) of the World Banks External Affairs Vice-Presidency.
This series is designed to share innovations and lessons learned in
the application of strategic communication in development
projects. Together with other donors, NGOs, and private sector
partners, DevComm seeks to mainstream the discipline of
development communication in development practice.
This paper reviews the experiences of the World Bank and its
clients in employing public communication programs during the
processes of privatization and private sector participation. Drawing
from academic and policy research as well as from case studies, it
highlights good practices and identifies lessons learned through an
examination of successes and failures. This book recommends
principles of strategic communication and offers a methodology for
researching and analyzing the communication issues associated
with privatization and private sector participation. It includes an
operational approach to design and implementation of public
communication programs for the various forms of privatization and
public-private initiatives.
World Bank Working Papers are available individually or on
standing order. These are also available online through the World
Bank e-Library (www.worldbank.org/elibrary).
DevComm
ISBN 978-0-8213-7499-0
SKU 17499
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Strategic Communication for
Privatization, Public-Private
Partnerships, and Private
Participation in Infrastructure
Projects
Daniele Calabrese
THE WORLD BANK
Washington, D.C.
WP139_FM.qxd 2/29/08 6:22 PM Page i
Copyright 2008
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ISBN-13: 978-0-8213-7499-3
eISBN: 978-0-8213-7-7500-6
ISSN: 1726-5878 DOI: 10.1596/978-0-8213-7499-3
Library of Congress Cataloging-in-Publication Data
Calabrese, Daniele.
Strategic communication for privatization, public-private partnerships and private participa-
tion in infrastructure projects / Daniele Calabrese.
p. cm.
Includes bibliographical references.
ISBN 978-0-8213-7499-3
1. Communication in economic development. 2. Public-private sector cooperation. 3. Economic
development projects--Management. 4. Public works--Management. I. Title.
HD76.C34 2008
338.9--dc22
2008002552
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Contents
Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
1. Why Include Strategic Communication in Initiatives for Privatization,
Public-Private Partnerships, and Private Participation in Infrastructure? . . . . . . 1
The Purposes of a Strategic Communication Program. . . . . . . . . . . . . . . . . . . . . . . . 2
Reform Failures Due to Lack of Communication . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Reform Successes Due to Inclusion of Communication . . . . . . . . . . . . . . . . . . . . . . . 6
2. Strategic Communication Program Design: Analysis and Strategy . . . . . . . . . . . . 9
Types of Privatization and Public-Private Partnerships. . . . . . . . . . . . . . . . . . . . . . . . 9
The Reform Arena . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Institutions: Changing Incentives and Accountability . . . . . . . . . . . . . . . . . . . . . . . . 11
Integration of Communication Analysis in Program Design . . . . . . . . . . . . . . . . . . 11
Transparency as Key Element of Reform. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Building Public Trust for Public-Private Partnerships . . . . . . . . . . . . . . . . . . . . . . . . 16
3. The Structure of a Strategic Communication Program . . . . . . . . . . . . . . . . . . . . . 17
The Communication-based Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Understanding and Involving Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Objective of a Communication Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4. Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
LIST OF TABLES
1. Top Five Constraints to Privatization in Sub-Saharan Africa . . . . . . . . . . . . . . . . . . . . . 5
2. Public Perceptions of the Privatization Program in Jordan . . . . . . . . . . . . . . . . . . . . . 20
LIST OF FIGURES
1. Understanding of Public Sector Reform % of Respondents Rating Impediment
as Serious Obstacle to Economic Reforms Recently . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. Public Opinion Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3. Denitions of Privatization and Public-Private Partnerships. . . . . . . . . . . . . . . . . . . . 10
4. Adressing Stakeholder Importance and Inuence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
iii
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LIST OF BOXES
1. Communication Challenges and Success of Ghanas Urban Water Project. . . . . . . . . 7
2. Impact of Communication Interventions in the Water Sector. . . . . . . . . . . . . . . . . . . 8
3. Toilet Wars: Politics of Public-Private Partnerships of Urban Sanitation
Services in Ghana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4. Factors Analyzed by Communication Specialists. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5. ENDE in Bolivia: Promoting Transparency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6. Trust: A Key Issue in Infrastructure Reform. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7. Governmental and Political Analysis: Issues to be Covered by the
Communication-Based Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8. West Africa Gas Pipeline Project: How Communication Addresses
Political Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9. Power Sector Reform in India: Multidimensional Political Risk
and Communication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10. Employment Guarantees: The Case of Private Participation in the
Hungarian Energy Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11. Winning Workers Trust: The Case of the Nepalese Tea Pickers . . . . . . . . . . . . . . . . . 31
12. Working with the News Media: Goats, Corruption and the Press in Tanzania. . . . . 33
13. Stakeholder Participation in Rural Electrication in the Philippines . . . . . . . . . . . . 34
14. Civil Society Organizations in the Water Sector Reform in Ghana . . . . . . . . . . . . . . 36
iv Contents
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Foreword
A
s privatization, public-private partnership programs (PPP), public sector participation
(PSP), and private participation in infrastructure (PPI) become more complex and
controversial, we hope that this publication will help managers in public institutions and
state-owned enterprises to review, mitigate, and manage political and development risks
associated with these transactions and to create open platforms for stakeholder engage-
ment and dialog by employing communication strategies and tools. The work draws exten-
sively from the toolkit published by the World Bank in 2002 on Public Communication
Programs for Privatization Projects.
This publication reviews the experiences of the World Bank and its clients in employing
public communication programs during the processes of privatization and private sector
participation. Drawing from academic and policy research as well as from case studies, it
highlights good practices and identies lessons learned through an examination of successes
and failures. This publication also recommends principles of strategic communication and
offers a methodology for researching and analyzing the communication issues associated
with privatization and private sector participation. It includes an operational approach to
design and implementation of public communication programs for the various forms of
privatization and public-private initiatives.
The Development Communication Division of the World Bank believes that strategic
communication can help privatization and private sector participation programs work
better and be more socially and politically sustainable. Literature on these types of pro-
grams is understandably vast and this publication is not intended to address the broader
subject of privatization. Rather it is meant to provide managers of privatization programs
with tools for dealing with the most pressing issues at hand: How should the concept and
practice of privatization be communicated in order to make projects successful? Which
operational instruments are best suited for creating dialog with stakeholders and better-
informed decisionmaking?
The range of privatization initiatives represents important instruments of economic
and social policy in many developed and developing countries. These affect some core values
around which societies are organized and have repercussions for the traditional relation-
ship between institutions and citizens. It is critical for all stakeholders to understand what
is at stake when governments decide to privatize state-owned enterprises (SOEs). Public-
sector reforms, public-private partnerships, and privatization constitute a signicant part of
the World Banks lending and technical assistance programs. The structural nature of these
reforms might require that all stakeholders accept a signicant change in beliefs, interests,
and perceptions about the nature of delivery of public services. Privatization programs,
therefore, require a shift in the rights and responsibilities of all societal players and call for
a signicant mobilization of civil servants, businesses, academics, media, consumers, and
civil society to move the reforms forward and make them work better.
Over the past decade, the World Banks shareholders have come to expect economic
reform programs to have a greater impact on poverty reduction. This trend has coincided
with broader demand for greater participation in development from civil society, which,
in turn, has signicantly changed the way the World Bank operates. Consequently, the task
of communicating more effectively with citizens and key stakeholders on privatization
v
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issues has become more challenging, complex, and, more importantly, necessary. New
expectations have set higher standards for transparency and accountability on the part of
all stakeholders who want to know more about how reforms can have a signicant impact
on poverty reduction.
Communication activities that were solely based on the output of products, such as
radio and TV spots, newspaper ads, and the like, are no longer sufcient to meet the
demands for participation, accountability, and transparency. Now, complex and innovative
performance measurements have to be used to evaluate peoples satisfaction with privatiza-
tion programs aimed at improving public service delivery. Innovative implementation and
measurement tools are also needed to assess political and social sustainability of privatiza-
tion reforms. These require a systematic approach that integrates opinion research, political
analysis, communication strategies, and planning.
These external demands have coincided with growing demand from inside the World
Bank itself. Task team leaders ask for tools to manage projects reputational risks and enhance
the long-term sustainability of reform processes by enabling widespread stakeholder
participation and local ownership.
In order to meet these challenges, there is the need to design two-way communication
programs on the basis of development impact rather than project outputs. This entails
moving from isolated tactics, usually product-driven, to long-term strategies. Public com-
munication programs not only have to build support for privatization, but also must promote
changes in social and political perceptions and values. To be effective, these communica-
tion programs must be based on socio-political analysis of stakeholders; development and
pre-testing of key messages; and use of the most appropriate communication channels.
Fundamentally, this process involves an analysis of what types of stakeholders are
affected by a privatization program and private sector participation and which instruments
can open space for two-way dialog and participation. Strategic communication programs
woven into all stages of a projects development dene clear responsibilities for design,
implementation, budget needs, and ongoing monitoring mechanisms to evaluate the long-
term impact of the program.
This publication is divided into two sections. The rst section includes examples of pri-
vatization efforts, failures and successes, noting the role that was played by communication,
or lack thereof. The second section sets out the key concepts and tools that communication
specialists bring to privatization programs, along with examples of their effective use in both
developed and developing countries.
Paul D. Mitchell
Manager
Development Communication Division
The World Bank
vi Foreword
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Acknowledgments
T
his work would not have been possible without the contributions of the members of
the Development Communication Division (DevComm) who have provided numerous
materials and examples to enrich the work that went into the original toolkit on Public
Communication Programs for Privatization Projects, as well as into this publication. In
particular, the author would like to thank Grazia Atanasio, Karla Chaman, Colleen Gorove,
Paul Mitchell, Fabio Santucci, and John Speakman for their advice and contributions to
this work, Umou Al-Bazzaz for her support with the publisher, as well as Zita Lichtenberg
and Barbara Catherwood for their editorial assistance. Special thanks go to Massimiliano
Giamprini who has inspired the author in a number of fruitful conversations on commu-
nication and economic reforms and who has greatly assisted in the organization of content
for this publication. The views expressed herein are in solely those of the author and con-
tributors and not of any of their afliated organizations.
vii
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CHAPTER 1
Why Include Strategic
Communication in Initiatives for
Privatization, Public-Private
Partnerships, and Private
Participation in Infrastructure?
T
echnically sound privatization, public-private partnerships, and private sector
participation projects in infrastructure can fail without a full understanding of
socio-political dynamics and the value of communication in their design imple-
mentation. It is worth remembering that the very term privatization has a communica-
tion origin: in the 1980s, after the term de-nationalization spurred strong opposition to
the selling of the state-owned British Aerospace, the government decided to adopt the term
privatization in hopes that it would be less controversial. Today public asset divestment
programs undertaken by governments around the world are under severe scrutiny from
civil society organizations and citizens. Privatization programs can take different forms and
degrees in the transfer of asset ownership and management of the service to consumers.
Specically, they can be complete sector divestments (telecom, other productive indus-
tries), private participation in infrastructure
1
(energy, ports, railways, and roads), or public-
private partnerships (water services). For any of these initiatives, it is crucial to incorporate
communication analysis and stakeholder engagement at the policy and program formula-
tion stage. In this context all the privatization terminology will be used interchangeably
vis--vis the sectors and countries proled in the publication.
It is now widely accepted that the success of privatization depends on the maturity of
the institutions in the market economy, including legal frameworks on property rights,
private contracts, dispute resolution mechanisms, and rules of entry and exit for business
enterprises. For privatization programs to be sustainable, however, they need to be properly
understood, taking into account the interests and perceptions of all stakeholders. This
1
1. For more information about Privatization, Private Participation in Infrastructure (PPI) and
Public-Private Partnerships (PPP) please visit www.ppiaf.org and ppi.worldank.org
WP 139.qxd 2/29/08 6:24 PM Page 1
necessitates using strategic communication as policy design tool, rather than something
added on once a policy has already been formed.
In the 1990s, many privatization programs in developing countries proceeded slowly
or were aborted because of signicant misconceptions and opposition among the general
public. Whether opposition was voiced by political leaders, labor unions, media, specic
stakeholder groups, or the public at large, these programs failed or were damaged because
steps were not taken to secure the necessary political and social support.
Communication activities for the range of private sector participation initiatives are
more than just public relations. Their challenges and obstacles cannot be solved with
traditional public relation tools, such as press releases, press conferences, and lobbying
activities. Privatization programs require a carefully conceived and systematically applied
approach to communicationone that integrates communication analysis and planning
at each stage of the design and implementation. When used effectively, strategic commu-
nication can signicantly increase political and social sustainability by creating space for
dialog and stakeholder participation in the decisionmaking process.
The Purposes of a Strategic Communication Program
A strategic communication program for privatization, private sector participation, and pub-
lic private partnerships serve two broad purposes. First, it helps to avert failure by identifying
current and potential sources of both support and opposition. This information is crucial not
only in setting priorities for communication objectives, developing sound messages, and
selecting the best possible communication channels, but also in using those channels effec-
tively and creating new ones if needed. Communication research can raise awareness of an
unsustainable status quo, uncovering existing attitudes on a range of relevant issues, such as
the drain on public funds due to poor management of state-owned enterprises, political inter-
ference, clientelism, and nepotism. A well-designed communication program can explain the
role of private interest in creating incentives to make society, as a whole, more prosperous.
Second, a systematic approach to communication helps to achieve a well-tailored privati-
zation and private sector participation program, serving as a two-way check and feedback
mechanism at every stage, from planning through execution. Public communication programs
offer managers in public institutions and state-owned enterprises tools for the privatization
process that coordinate well with national economic programs and t political and social needs.
Communication programs create mechanisms for dialog with stakeholders through
which expectations for privatization can be managed. Failure to use communication pro-
grams results in negative consequences found in countless development projects involv-
ing privatization. Neglect of consensus building among stakeholders for privatization
weakens a projects opportunity for success and sustainability. The consensus-building
process needs to be considered at every stage, from the initial conception and strategic
planning through the implementation. When preparing for privatization initiatives, a gov-
ernment and its advisers should make substantial efforts to engage political parties, man-
agers of publicly owned enterprises, unions, workers, civil servants, business leaders,
potential investors, national and international civil society organizations, and consumers
about the programs operations and benets. General consensus may not be possible, but
information ow and awareness raising among all stakeholders are often prerequisites for
success in the range of privatization initiatives.
2 World Bank Working Paper
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A sustained government effort to explain the expected benets of privatization and the
reasons for choosing specic approaches and techniques can help build a broad consensus.
In 1996, a World Bank and Harvard University survey (Kaufman 1997) in 63 developing
countries ranked priority concerns of senior public servants and civil society representatives
about failure of reform processes (see Figure 1). The majority of respondents highlighted
political factors and corruption as the biggest impediments to reform. This research
indicates that strategic communication of government engagement in anticorruption and
ethical practices aids the understanding success privatization programs.
For example, transparent and competitive sale procedures can reassure people who
fear that public assets are being transferred to private operators at prices well below their
true value. When these practices are not transparent, opponents of privatization are free
to make false claims regarding the procedures that can worry or anger key constituencies.
Even when transparent and competitive procedures are used, they can only effectively
assuage fears if their use is preceded by adequate publicity and discussion.
Figure 2 that follows shows results from 19982002 Latino-Barometer public opinion
surveys conducted in 17 Latin American countries at the national level on perceptions
vis--vis the benet of privatization programs to the country and the economy. Considering
that most of Latin American countries underwent a series of privatization and public private
partnership programs during the late 1990s with peak of public sector divestments in infra-
structure, including water, telecom and energy if the years 19982000, the steady decline
in public perceptions of the value and contribution of these programs to country
economies calls for an integration of strategic communication into critical public sector
Strategic Communication for Privatization, Public-Private Partnerships 3
Figure 1. Understanding of Public Sector Reform % of Respondents Rating
Impediment as Serious Obstacle to Economic Reforms Recently
Source: Kaufman, 1997.
20%
30%
40%
50%
60%
70%
80%
90%
Economic
Reform
Understanding
by Leadership
No Sense
of Crisis
Social & Poverty
Considerations
Weak
Institutional
Capacity
Lack of Cohesive
Reform Team
Economic
Reform
Understanding
by Population
Corruption &
Vested Financial
Interests
Short-Term
Political Factors
All Respondents Public Sector Respondents
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reforms at all stages. In fact, even after transactions occur, there is still a need to create
spaces for dialog, show progress, and build support for reform.
Further examples of privatization and public-private partnership initiatives through-
out the developing world highlight the role, or lack thereof, of strategic communication in
the success or failure of a variety of reform programs.
Reform Failures Due to Lack of Communication
The following examples, and the constraints listed in Table 1, illustrate the variety of
settings where the lack of strategic communication hindered the success and sustainability
of development initiatives in privatization, public-private partnership programs, and pri-
vate participation in infrastructure.
Bangladesh
In the late 1990s, the government neglected to involve local workers in the decisionmaking
process to privatize a dockside warehouse. Uninformed, the workers feared losing their
jobs and were strongly inuenced by their trade union leaders opposition to the privati-
zation. The governments rst communication with the workforce came too late. When a
prospective investor visited the enterprise, a security guard threatened to kill him. The
investor ed the country. After this incident, the entire project and transaction stalled for
several years. Identifying the workers as important stakeholders, designing and imple-
menting a communication program to ward off misinformation, and allaying fears could
have averted the problem by allowing the government to acknowledge the workers con-
cerns; prepare sensitive educational materials; and organize meetings to discuss the likely
results of privatization (Adam Smith Institute 2000).
Figure 2. Public Opinion Surveys
Source: Latinobarometro surveys, 19982002.
% agreeing: privatization has benefited the country
50
45
40
35
30
25
20
15
10
5
0
1998 1999/00 2001 2002
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Turkey
In the 1990s, the privatization program did not consider fully national and regional political
and social dimensions. The social safety net development, including labor adjustment
programs, was badly timed and was not accompanied by any serious communication
program. Lack of strategic communication allowed erce resistance from trade unions to
continue unabated (Calabrese 2002).
Ukraine
Tension between pro- and anti-reform forces in government and parliament stalled the
privatization process in the late 1990s. Recommendations for future programs pointed to
the need to build broader support among stakeholders, NGOs, business associations, and
political parties through effective use of strategic communication (Calabrese 2002).
Senegal
In 1994, a national privatization program came to a halt after meeting with considerable
resistance from politicians, employees of public enterprises, and the society at large. A main
cause was the lack of stakeholder involvement. Stakeholders were not informed about their
major concerns: the redistributive use of privatization proceeds, the links between poverty
alleviation and expected outcomes of privatization, the underlying need for reform, and
the potential benets for the public (Bhatia and Campbell-White 1998).
Table 1. Top Five Constraints to Privatization in Sub-Saharan Africa
Constraint Causes Effects
Lack of consensus Lack of information Weak government commitment
Lack of political will Slow process
Ideological beliefs Reluctance to sell enterprises
Vested interests
Political uncertainty Historical setting Tardiness
Democratization Investor uncertainty
Forthcoming elections
Inadequate management Weak institutional and human Lack of transparency
capacity resources capacity Distrust of valuation methods
Lack of commitment Poor design and preparation
Fragmentation Incomplete transactions
Legal constraints Old legislation Insufcient authority given to
Lack of commitment agency
Weak judicial system Slow process
Lack of program Institutional jealousies and Lack of consensus
ownership government interference Perception of program as driven
Lack of involvement of by external agencies
indigenous private sector
Donor driven
Source: Privatization in Africa, Campbell-White and Bhatia, 1998.
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Mozambique
An opinion poll conducted during the implementation of the privatization program in the
1990s showed that most citizens in opposition believed that public enterprises had been
sold to foreigners. In fact, 93 percent of the private capital involved in the privatization was
national (Bhatia and Campbell-White 1998).
Benin
The government failed to explain its privatization policy to the public, and the 1992 Pri-
vatization Law was harshly criticized. Although the privatization plan was transparent, for
instance the details of procedures and bidding processes were open to public scrutiny, the
governments lack of strategic communication played into the hands of political opponents
(Bhatia and Campbell-White 1998).
Kenya
In January 1995, 41 opposition members of the parliament published a press statement
calling for some draconian measures against privatization, including the immediate
removal of the head of the privatization agency, an investigation of the agencys activities,
and the reversal of a privatization transaction. The attack revealed a lack of public awareness
about the difcult conditions of public enterprises in the country (Bhatia and Campbell-
White 1998).
Reform Successes Due to Inclusion of Communication
Increasingly, managers responsible for planning and overseeing development initiatives in
privatization, public-private partnership programs, and private participation in infra-
structure are appreciating the lessons learned from past failures and making strategic
communication a high priority in project design and implementation. The following
examples, and the case cited in Box 1, represent the positive impact that strategic commu-
nication can have on development outcomes.
Guatemala
In 1999 after conducting opinion research, a think-tank advising the government identi-
ed a powerful trade union, implacably opposed to any kind of reform or privatization, as
being the most critical stakeholder to address. The workforce was identied as an even
more important stakeholder for the success of privatization, but this group was difcult to
reach due to the unions blocking of channels of communication. It seemed that the workers
were being, at the same time, purposefully misled and frightened by union leaders. The
government responded by sending a letter to the home of each factory worker, addressed
not to the workers but to their wives outlining several benets of privatization, such as
share-options and potential redundancy benets. In the end, the pressure from wives out-
weighed the objections of the trade union and the workforce supported the privatization
(Adam Smith Institute).
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Zambia
In 1996 the government embarked on water sector reform, involving the establishment of
three water companies. A communication program facilitated the participation of the trade
unions by ensuring they were informed partners at every stage of the privatization process.
Moreover, the Zambian Congress of Trade Unions played a major role in a wide-ranging
public debate (Calabrese 2002).
South Africa
In 1998 ESKOM, a large public electric utility, implemented the governments policy of
rapidly increasing the provision of electricity to disadvantaged sectors of the economy. Due
to its sheer dimension, the implementation of this policy required ESKOMs deep restruc-
turing. The company established a special task force of three executive directors to redesign
Box 1: Communication Challenges and Success of Ghanas Urban Water Project
The Ghana water sector has been characterized by limited coverage: only 51 percent of the
population has access to improved water supply and less than 40 percent to sanitation services.
The system has been in disrepair and operating below design levels. Lack of entrepreneurship
in the management of the sector, high levels of non-revenue water, poor billing collection, and
weak financial management were the roots of the problem.
The dismal nancial and commercial performance ensured the sector was unable to generate
enough revenues. Government realized the need for reform and launched a stakeholder consul-
tation workshop in 1995 to examine eight options for restructuring the sector. Participants decided
on Private Sector Participation (PSP) in the water sector, rst a lease and then, in 2004, a man-
agement contract. The communication challenges were to broaden the debate, to communicate
this decision to people who had seen privatization fail to solve the problems associated with
state-owned enterprises, and to open up a dialog with urban-based groups.
Approach: The government decided to avoid a quick and dirty communication approach. They
developed a communication strategy based on solid opinion research. The research revealed that
Ghanaians were dissatised with their current water service and were more concerned about the
availability (41 percent) and quality of water (32 percent) than the price (5 percent). Eighty-six per-
cent viewed PSP as favorable for the country, while 81 percent viewed PSP favorable directly to
them. Based on the results, the Ghana Water Project launched a Public Education and Communi-
cation Program aimed at ensuring that the public and key stakeholders had sufcient awareness
and understanding of the public policy aims of the PSP process. A Water Communication Commit-
tee, with communication managers of the various water-related organizations, was also set up to
ensure coordination and consistency of messages. The program included community rallies for
Resident Associations; tailored workshops and presentations to media, Members of Parliament,
NGOs, womens groups, labor unions and religious interests; and production and dissemination
of TV documentaries and radio talk shows.
Impact: The major outcome was the emergence of a pro-PSP coalition made up of some res-
ident associations, professional associations, and individual citizens. They marched in the
street urging government to speed up implementation of PSP. The coalition allowed the
debate to be more balanced and to consider alternative views to the NGO-sponsored
National Coalition against Water Privatization. In November 2005, a management contract
was finally signed with a consortium of private companies. The communication challenges
still persist and have taken a new shape, focusing on creating a new culture of transparency
and public oversight, which helps to maintain confidence in the system and keeps up the
pressure for better service.
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the organization with the assistance of specialized consultants, whose work included the
elaboration of a public communication program. The ve trade unions representing
ESKOMworkers participated in early consultations on the restructuring of the company.
ESKOMnot only provided detailed nancial and technical information, but also invited
the trade unions to engage their own independent technical experts in order to provide
feedback and advice (Calabrese 2002).
Evidence of the impact of communication on project design and performance is revealed
in a review done between 2002 and 2005 of fteen World Bank projects containing commu-
nication programs in the water and sanitation sector.
2
In 33 percent of these projects, the
communication program is credited with having a signicant impact on project design from
the redesign of a project to achieve consensus among stakeholders in Nigeria, to the splitting
of a project in Albania into two distinct components so the less controversial portion could
proceed without delay. Furthermore, in 40 percent of the projects reviewed, communication
programs were credited with building consensus and/or credibility for the government to
undertake the reform. Many of the projects studied involved private participationa par-
ticularly sensitive and easily politicized issue. Box 2 provides more details on the study and
results of the impact of communications in the water sector.
2. Development Communication Division, Presentation on Communication Research in the Water
Sector, World Bank, June 2005.
Box 2: Impact of Communication Interventions in the Water Sector
Fifteen water and sanitation projects that received communication support from the Development
Communication Division of the World Bank were reviewed to derive lessons learned and to assess
the issues common among these projects. Half of the projects with qualitative opinion research
were also reviewed to assess common perceptions, attitudes, and knowledge about water supply
and sanitation reform among consumers.
The following impacts of communication interventions were determined:
Prevented delays in project implementation
Ensured government commitment
Built credibility of process
Brought stakeholder inputs to project design
Leveraged new funds for communication
Improved client coordination
Assisted (or replaced) Social Assessment
Provided basis for consultations
The lessons learned from communication included the following:
Capacity and coordination of government to implement programs was primary issue
Projects rated politically risky are more likely to be delayed
Opinion research provides government with empirical data to make informed decisions
Biggest fear of citizens is cost
Communication program must include education on role of regulator
Health and water are linked very strongly
Government is trusted to provide services, but people still think that private sector participa-
tion will bring benets
Source: Development Communication Division Sector Review, The World Bank, June 2005.
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CHAPTER 2
Program Design: Analysis
and Strategy
M
anagers overseeing privatization, public-private partnership programs, and
private participation in infrastructure should integrate public communication
programs into the initiatives to build support and understanding that is crucial
to managing a privatization projects risk. A communication program enhances the sus-
tainability of project objectives over the medium and long term by involving stakeholders
in the decisionmaking process. For lasting success, privatization strategies need to be
tailored to the political economy and specific circumstances of the country concerned.
Once the privatization strategy and its priorities are determined, the communication
program is designed to take the very nature of the privatization process into account.
Types of Privatization and Public-Private Partnerships
There are three primary methods of privatization and public-private partnerships: divest-
ment, displacement, and delegation. These methods are utilized according to the political
economy of the country. Divestment of state-owned enterprises occurs in various ways,
including selling assets to a single investor (rare), public-private joint venture, concessions,
operations and management contracts, management-employee buyouts, private nance
initiatives (PFI), free transfer of assets through shares or vouchers to employees and/or
citizens, and, nally, liquidation of the assets by public offerings of shares.
The second privatization and public-private partnership method, displacement, is a
process of gradual substitution of the public sector by private capital in the provision of
goods and services. Displacement usually takes place by default, for instance, when private
capital gradually enters into the supply of goods and services thus diminishing public sector
activity and capital share in a particular business. Additionally displacement can take place
9
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through restitution of capital when nationalized companies are returned to the original
ownersde-nationalization. The third method, delegation, occurs when a private company
manages a state-owned enterprise for a fee. Figure 3 presents different types and degrees of
privatization and public-private partnerships in infrastructure and public service delivery,
with examples from Bangladesh, Jamaica, New Zealand, Philippines, Portugal, South
Africa, UK, the former USSR, and the Government of Victoria in Australia (VIC).
The Reform Arena
Institutional reform under privatization and public-private partnership programs funda-
mentally shifts elements of authority and accountability away from large, centralized,
inwardly-accountable public authorities to smaller, decentralized, outwardly-accountable
private operators. In infrastructure projects and water provision programs that specically
rely on water consumers who pay tariffs, the consumers can hold service providers
Figure 3. Denitions of Privatization and Public-Private Partnerships
Source: Finance and Private Sector Development Vice Presidency, the World Bank 2007.
PPPs PFI
Concession
Privatization -
Regulated
Privatization -
continuing
interest
Privatization -
purely
commercial
Public
provision
O & M
Contracts
Management /
Service
contracts
Misc. Manufacturing (Philippines)
Textile & Sugar Mills (Bangladesh)
Airline (Jamaica, New Zealand)
Railway (New Zealand)
Electricity Distribution (UK, VIC,
Jamaica)
Railtrack (UK)
Water Supply (Manila, Philippines)
Toll Roads (South Africa)
Facility Availability
Service or product
Toll Road (Portugal, VIC)
Bulk water supply (VIC)
Some Schools (UK)
Court Building (VIC)
Jamuna Bridge (Bangladesh)
Tram and Train Contracts (VIC)
Hotels (Jamaica)
Motorways (South Africa, pre-1999)
Market economy
State-owned
economy
Schools (Philippines)
Roads (New Zealand)
Schools (USSR pre 1990)
Roads (USSR pre 1990)
P
P
P

-

C
o
r
e
P
P
P

-

B
r
o
a
d
e
s
t

D
e
f
i
n
i
t
i
o
n

P
u
r
e

P
u
b
l
i
c
P
u
r
e
P
r
i
v
a
t
e
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accountable and demand performance improvements directly from themthe so-called
short route of accountability.
Because water supply is an essential public good, the politics around it are often potent.
For example in the case of water, politicians will try to retain control of tariff setting, some-
times based on legitimate social concerns, other times to please their constituencies.
Private sector vendors will resist expanded coverage and more reliable water networks as
bad for their business. An important supply-side aspect of the political economy of urban
water and sanitation is that investment requirements for source development, mains,
sewerage, and treatment plants are substantial and have long-term effects on nances, as
well as on general urban development issues.
Institutions: Changing Incentives and Accountability
In many countries, urban water supply management and tariff-setting has been, and still
is, controlled by a central agency or utility. Introducing privatization and public-private
partnership management contracts containing tariff reform necessitates a shift away from
reliance on taxes and donor funds toward reliance on income from utility customers. Some
reformers reason that cost for service provisions should be fully recovered through tariffs
and that all consumers must be tariff-paying utility customers. If politicians are reluctant
to raise tariffs for political reasons, the consequences for water supply sector reform can be
terminal if not combined with other measures: improvement in collection rates; enlarge-
ment of customer base by charging all consumers, including those exempted (for example,
public institutions); decrease in non-revenue water; and improvements in service quality,
such as increased service hours.
Centralized public water agencies or utilities can resist tariff reform due to lack of or
aversion to accountability to customers, resulting from various things, including tradition,
perverse incentives, and so forth. An example of the complexities involved in establishing
a functional public-private partnership in the context of urban decentralization is the pub-
lic toilets in Ghana (refer to Box 3). The establishment of appropriate public sanitation was
blocked by a combination of institutional path dependency, decentralization without s-
cal decentralization, privatization of small, but only semi-independent public services,
political patronage systems, and rent-seeking behavior.
Integration of Communication Analysis in Program Design
The rst step in designing a successful privatization strategy is to dene the key objectives
driving a governments overall economic program, as well as the governments particular
objectives for privatization. The privatization plan then becomes a sub-strategy geared to
the objectives of the governments broader economic reform program. This assessment is
necessary to design relevant public communication programs and the feedback generated
improves the design and overall strategy of a privatization program. The communication
assessment is therefore useful before the elaboration of the privatization program. Assess-
ment and feedback on the variety of factors listed in Box 4, for instance, can help policy-
makers decide the timing, pace, and sequence of privatization transactions.
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Box 3: Toilet Wars: Politics of Public-Private Partnerships of Urban Sanitation
Services in Ghana
In the cities of Accra and Kumasi in Ghana, public toilets have been poorly managed and are the
site of local political conicts, toilet wars, despite efforts at franchising and community man-
agement. Notwithstanding nearly 20 years of experiments with various forms of public toilet
management by political groups, community businesses, and the Sub-Metropolitan Districts
(SMDs), the situation has not changed much as of early 2003.
By the mid-1980s, there were 384 and 400 public toilets in Accra and Kumasi respectively, used
by 38 percent of the population in Kumasi, and 25 percent in Accraall in the poorest areas. At
that time, structural adjustment started rationalizing the public sector work force, affecting san-
itation laborers who used to clean the toilet facilities. District and metropolitan assemblies were
mandated to collect user fees for the cleaning and maintenance. However, a high number of pub-
lic toilets lacked adequate nancing or fee income for maintenance. Problems were exacerbated
by the continuing funding crises and never-ending retrenchments in the decentralized govern-
ment system. This reinforced the appeal of a franchising or contracting policy to relieve local gov-
ernment authorities of the maintenance burden and to offer prospects of an improved revenue
stream.
Public-private partnership (PPP) policies began in the 1990s, and toilet management and main-
tenance were formally privatized in 1994. Franchising and subcontracting of revenue-earning
public services became extremely popular with the newly-elected local political elites. These
initiatives had potential for boosting public revenues. They also rapidly became prizes in the
political patronage networks of the city governments. The franchises involved revenue-sharing
agreements between the franchisees and the SMDs: they remained one of the few sources of
revenue still under SMD control. SMDs relied on the toilets for around 6070 percent of their
total revenues, which nevertheless remained totally inadequate. Contracts were supposed to
be given to registered local companies with demonstrated capacity, but in practice beneciaries
tended to be the assembly members who used front companies as community businesses to
employ local people. Many contractors were former leaders of Committees for the Defense of
the Revolution (CDRs) from the 1980s, who continued to be dominant in local politics, but
were (and remain) officially non-party. Toilet wars erupted when new generations of
assembly members challenged the dominance of the old CDR leadership. Public toilets became
politically protected business opportunities, which, like taxis or bars in other cities, were given
out as political favors. Privatization led to a decline in the power of officials and increase in the
power of politicians and contractors, forming a nexus of patronage relations hard for officials
to challenge.
From 2000 onwards, the new governments policy emphasizes real, transparent, and competi-
tive privatization, in contrast to the franchising policies of the 1990s. Two new metropolitan chief
executives for Accra and Kumasi were appointed, hoping that this would ensure implementation
of the radical privatization policy. However, this brought the new chief executives into conict with
established local political networks, even within their own party. Full-scale political conicts
developed between assembly members and the chief executives, principally over their stated
intention to introduce full transparency into the tendering procedures. The arrival of new cohorts
of elected members simply produced new, often violent conicts between former and new assembly
members deriving from direct action takeover battles for physical control of the toilets between
groups associated with different assembly members.
Community groups in the poorest districts were frequently created by or dependent upon local politi-
cians and, in some cases, were part of an urban political machine. Thus, the normal logic of electoral
politicswhere politicians are punished for poor performance when they dont bring government jobs
and amenities to their localitiesdid not operate. Instead, the revenues generated by the privatiza-
tion of essential public services, such as public toilets, were siphoned off by politicians who either
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The experience of the 1980s and 1990s shows that the sequence and pace of privatiza-
tion should be considered from the outset, taking into account timing relative to other
reforms occurring in the macroeconomic and state-owned enterprise sectors. The quanti-
tative and qualitative research tools that are part of communication-based assessment help
to ne-tune the sequencing, as well as providing it with more exibility. The rst part of
the analysis involves opinion research, which can offer a wealth of information on the tim-
ing of parallel economic reforms and can identify major stakeholders perceptions of and
interests in privatization. This opinion research, conducted repeatedly over the course of
months and years, tracks changes in support, opposition, concerns, and perceptions of key
stakeholders, as well as the general public. The analysis of the opinion research provides a
crucial tool for decisionmakers to continually ne tune a privatization and public private
partnership initiative.
The communication specialists must analyze carefully the political, economic, social,
and institutional setting, as privatization is fundamentally a political process. Assessing
stakeholders and policymakers interests anticipates likely obstacles. Reluctance or resis-
tance, both within and outside the government and the relevant privatization agencies, can
Box 3: Toilet Wars: Politics of Public-Private Partnerships of Urban Sanitation
Services in Ghana (Continued)
owned or protected them, in order to buy the support of crucial opinion leaders and community vote-
brokers. The actual performance of the service became less important than the privately distributed
payoffs it generated. The lack of party competition in Ghanaian local government also reinforces the
power of well-connected politicians to punish community groups who step out of line, as well as to
reward those who accept the benets on offer. So the public toilets remain overowing and unemp-
tied for months on end. The political power of elected members and city ofcials, community politics,
and patronage opportunities offered by this form of privatization are inextricably linked and cannot
be depoliticized, least of all at the community level. It is only when these realities are recognized that
different and perhaps more effective policies can be developed.
Source: Based on Ayee and Crook (2003).
Box 4: Factors Analyzed by Communication Specialists
Credibility of the government and other public institutions
Trade unions willingness to collaborate
Ownership history of company to be privatized
Efciency of governments democratic decisionmaking
SOEs nancial and competitive position
Governments ideological view of markets and regulation
Regulatory structure in the country, both current and planned
Governments ability to commit, credibly, to respecting investor rights after divestiture
Capital market conditions and institutional framework for corporate governance
Sophistication of potential investors
Governments willingness to let foreigners own divested assets
Current and potential role of the news media.
Source: Development Communication Division, The World Bank, 2004.
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hinder the privatization process and limit its scope. Such opposition, which must gure
into the denition of the communication strategy, can stem from a variety of concerns:
Preservation of national economic sovereignty or independence;
Desire to retain control over certain activities or interests;
The idea that state ownership is needed to safeguard the public interest;
Concern that wealth might become concentrated in the hands of a few;
Distrust of all or certain segments of private sector and capital;
Protection of bureaucratic and vested interests;
Dismantling of industries;
Labor unrest resulting from job losses; and
Rising tariffs and costs.

There are numerous aspects of the political economy relating to privatization, public-
private partnership programs, and private participation in infrastructure in which com-
munication can play a pivotal role. For example, many of these initiatives are designed
and implemented by high-level bureaucrats and civil servants. The privatization process,
however, may adversely affect the civil service and state managers. A key focus of most
privatization strategies, therefore, should be to overcome bureaucratic hostility. Strategic
communication activities can consult and inform staff members through the process and
assure them of their benefits and future career opportunities.
Firm commitment by a countrys top political leaders is a prerequisite for the success
of a privatization program. Stakeholders and policymakers who champion the reform
should be included as part of the communication effort and should be at center stage in
the public discourse on privatization. Citizens must have condence in the process, and
political leaders must gain their trust by showing commitment, progress, and results. In
the case of the privatization of Mexicos telecommunication company, strong leadership
was present. The president appointed the minister of nance as chairman of the board and
gave him overall responsibility for the privatization.
Transparency as Key Element of Reform
The political nature of privatization requires that it must be conducted with integrity and
transparency. For instance, Argentinas ambitious privatization of the telecommunication
agency, ENTEL, was successful because President Menem established his ofce as the political
champion of the reform program, and his government espoused the reform so clearly and
supported it so vigorously.
Transparency is a critical ingredient of improved governance, and good governance is a
key development indicator for countries seeking better outcomes. In addition, transparency
measures have the benefit of scaling up other results as well: The coupling of progress
on improving voice and participationincluding through freedom of expressionwith
transparency reforms can be particularly effective (Kaufman 2005).
Lack of transparency is a recurrent complaint of critics of infrastructure privatization
processes around the world. The sale of a nations assets by a government makes many
uncomfortable, including those in the political opposition, members of civil society, and
the general public. A range of questions needs to be addressed: Is privatization really
WP 139.qxd 2/29/08 6:24 PM Page 14
necessary? Will the price paid by investors be a fair one? Are there going to be individuals,
either government ofcials or business people, beneting from the deal at the expense of
everybody else? Lack of information and misinformation fuels stakeholders fears. These
fears, while often unfounded, are understandable in situations when little is known about
the ailments of the state-owned enterprises slated for privatization or when the process of
sale itself is not a simple and clear one.
Governments can take many steps to lessen fears and to promote an open process that
fosters trust. One is being transparent about the poor condition of many state-owned
enterprises. While this seems an obvious measure, many governments are reluctant to
disclose the terrible state of these industries either because they or their political party was
partially responsible or due to fear of alienating powerful allies like unions. It is uncon-
ceivable, however, in democratic countries to promote a remedyprivatizationif
society has not internalized the ailmentinefcient and heavily subsidized state-owned
enterprises.
Another measure to build trust is for governments to select privatization processes that
are simple and foster clarity and transparency. In the mid 1990s, the Government of
Bolivia paid a lot of attention to these issues. First, it chose to privatize in auctions where
the winner was selected on a single variable: all bids had to be equal in all aspects but one,
thus reducing both confusion and scope for haggling after the bids were open. Price was
often the one variable upon which bids were to be compared. All participants were asked
to submit a pre-signed contract along with their bid, thus ensuring that the auction pro-
duced an immediate winner, leaving no room for after-the-fact maneuvering. The Gov-
ernment of Bolivia also committed to full transparency, not only making all the important
privatization documents public, but also choosing to televise the auctions. While the public
auctions never intended to attain a broad audience, they did serve to reassure skeptics that
the government had nothing to hide, thus reassuring citizens that the privatization process
was fair.
Applying communication to increase transparency in the development process can go
a long way toward reducing opposition to reform, thus reducing political risks. This is par-
ticularly helpful with issues already having a high degree of public distrust, for example,
the contracting process. Box 5 shows how important these measures were to the success of
Bolivias public-private infrastructure process.
Box 5: ENDE in Bolivia: Promoting Transparency
In Bolivia, where past experience with privatization was highly controversial, the government took
a new and aggressive approach to the issues of transparency in its introduction of private partic-
ipation in infrastructure (PPI) in ENDE, the state-owned electricity company. In 1995, the govern-
ment polled stakeholders to measure the causes for opposition to PPI. They found that although
many people objected to PPI in principle and were opposed to the idea of placing critical public
services under foreign ownership, their greatest concern was related to the perceived levels of gov-
ernment corruption in the process. In response, the Government opened the procurement process
for ENDE to public scrutiny, publishing invitations to bidders and promotional materials about
the investment opportunity in local Bolivian newspapers and arranging for live television cover-
age at the opening of sealed bids and the announcement of the winner.
Source: Pearson (1998).
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Building Public Trust for Public-Private Partnerships
Many privatization programs are highly visible, expensive and politically volatile. Gaining
public trust in the institutions undertaking the project and in the persons who champion
and implement these programs is a key priority. Perceptions of corruption, even if
unfounded, are enough to derail infrastructure reforms. Communication can pave the
path for two-way dialog on contentious issues, so peoples concerns and misconceptions
are addressed promptly before public condence and trust are eroded.
For infrastructure projects, trust can cut across many layers. Foremost, there is the
trust needed between citizens and their governments. Sometimes citizens mistrust is well
founded and based on past instances where a few ofcials have made decisions regarding
immense infrastructure investments and gained personally through corrupt practices.
These experiences have rightly shattered citizens trust in their leaders. In these cases, there
is nothing that communication could or should do to alter the accurate perceptions that
result. Where perceptions have not caught up with reality, however, when governments
have cleaned house and are prepared to undertake straightforward practices, communica-
tions can help to bridge the gaps between perceptions and reality by creating transparent
mechanisms and platforms for dialog in which trust can take root.
Other layers in infrastructure projects where trust frequently comes into play are with
regulatory authorities and the private sector. The role of a regulatory authority in infra-
structure development programs is often little understood. Consequently there is a lack of
trust in their ability to ensure that private companies do not increase tariffs excessively.
With the private sector, there is often a mistrust of intentions and fear of price hikes from
unscrupulous operators. Box 6 contains an example from Mauritius. Although this is one
the most challenging areas of intervention for communication professionals, good com-
munication programs can facilitate mutual engagement and participation, help to bridge
gaps, and create the trust that is needed for infrastructure development to succeed.
Box 6: Trust: A Key Issue in Infrastructure Reform
In late 2003 opinion research in Mauritius on an IFC private sector participation initiative in the
water sector showed that trustor lack of itwas an important issue in why the public felt reti-
cent about the impending reform. Whereas citizens were hoping for better drinking water and
sanitation services, and to a large extent were aware that some sort of public-private partnership
would be the best option to provide those services, they expressed a signicant level of mistrust
in the process and the ability of the government to carry out the reform properly. In particular,
citizens were concerned about the lack of transparency: the possibility that the government talked
about a privatization support project (PSP) yet wanted to outright privatize the water utilities, leav-
ing them in foreign hands. Mauritians were concerned about corruption in the process and that
unfavorable deals might be done under the table. A majority of the population also did not trust
the governments capacity to ensure that a private operator would not raise the water tariffs to
levels they could not afford. This absence of public trust was an important element in the gov-
ernments understanding that it lacked the sufcient political capital to move ahead with the
reform at that time.
Source: Development Communication Division operational support. The World Bank, 2003.
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CHAPTER 3
The Structure of a Strategic
Communication Program
E
ffective communication programming for privatization, public-private partnership
programs and private participation in infrastructure is based on sound opinion
research and analysis, coordinated across ministries and sectors, and integrated with
governments overall planning of economic reform programs. It is not limited simply to
media or public relations events but makes full use of formal and informal communica-
tion channels available in a country, informing and building consensus, listening to impor-
tant stakeholders, conveying and sharing a vision, publicizing progress, and creating
condence.
The rst structural prerequisite of a successful public communication program is the
availability of funding. Securing funding for strategic communication activities is a priority
that government decisionmakers and World Bank project teams should address at early
stages in the design of any project. The World Bank experience shows that funding sources
for communication activities are varied: the governments in Brazil and in Nigerias Lagos
State-funded communication activities for World Bank-supported privatization projects;
the World Banks project budget provided funds for communication in Colombia,
Uruguay, Paraguay, and Yemen; bilateral donors gave funds in Ghana, Jordan, and Nigeria;
the Institutional Development Fund granted funding in six Central American countries,
Niger, and Romania; Australian funds were used in India; and PHRD funds in Nigeria. The
very nature of communication activities and their benecial impact on privatization sponsors
greatly facilitate a exible approach to funding.
The second structural prerequisite for effective communication programming is to
ensure high-quality, technical expertise to help a government develop a well-articulated
strategy. Clear goals, professional opinion research, and messages delivered by credible
communication sources through optimal channels are critical for success. In order to
17
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achieve project goals, communication technical assistance and capacity building may be
needed at different stages throughout the communication program.
The third prerequisite is linked closely to the second and ensures positive collabora-
tion moving forward. A team representing all key agencies involved in the privatization
ideally should agree to the well-dened goals that drive both the communication program
and the privatization initiative on which it is based.
Several critical elements serve as the building blocks of a public communication pro-
gram: identication of segmented stakeholders, key messages to be delivered, and institutional
framework and communication channels to be used. The unique interests, perceptions, and
relative weight in affecting policy outcomes of each stakeholder group must be analyzed. Dif-
ferent stakeholders may require separate communication approaches. Finally, at successive
stages of implementation, a communication strategy involves ongoing evaluation, based
mainly on opinion research, to determine whether any of the approaches adopted need to be
modied.
The Communication-based Assessment
The communication-based assessment is critical for design and implementation of a
communication program (Chaman and Mitchell 2007). It is divided into four main parts:
government and political risk analysis, stakeholder analysis, assessment of institutional
arrangements and local capacity, and nally social and participatory communication. This
publication focuses on the rst three elements. The communication-based assessment is
usually undertaken during project identication and preparation. It serves as the tool for
gathering social and political information, analyzing public values, valuating risks, and
dening the priorities that require further attention.
A communication-based assessment begins by estimating communication needs in
relation to the privatizations political, social, and cultural environment. It establishes an
initial understanding of the context and the kinds of approaches to communication that
may be needed. The communication-based assessment helps to identify key clusters of
stakeholders, to gain insight into their concerns about privatization and private sector
participation, and to aid decisionmakers to recognize possible obstacles to privatization.
The assessment also identifies stakeholder perceptions, expectations and desires;
analyzes what would constitute the most appropriate messages and messengers; and estab-
lishes the most effective communication vehicles for articulating these messages.
By providing a methodology for systematic consideration of such key questions, a
communication-based assessment enables project teams and policymakers to set priorities
for designing and implementing a public communication program in relation to the overall
privatization.
Since a sound communication program requires a clear understanding of stakeholders
perceptions, attitudes, and behaviors vis--vis privatization, a communication-based
assessment requires the collection of both qualitative and quantitative information. The
qualitative component is carried out through methods such as focus groups discussions
(FGDs) and in-depth interviews.
The purpose of this approach is to listen to key stakeholders such as Parliament
members, community leaders, state-owned enterprise managers, workers, private business
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providers, opinion leaders, and the media at the national and local level. Although the
results obtained through focus groups discussions are not strictly applicable to larger
groups of stakeholders, they can be built into the design of a questionnaire to be used in a
general survey.
The quantitative component of the communication-based assessment consists of a
survey of the general public, using a representative sample of the population to ensure
statistical viability. This component is usually based on the composite learning of the
qualitative component. Its main aim is to test quantitatively the assumptions based on the
results of the focus groups discussions. It provides decisionmakers with valuable informa-
tion on the publics perceptions of the role of the government in privatization and on
benets or shortcomings linked to the reform. Information is collected on the relative
importance attributed to transparency, to the provision of public services by private
operators, and to the quality of service delivery.
Privatization in Jordan is a good example of the role of qualitative and quantitative
surveys in a World Bank-nanced privatization project. The Center for Development
Communication (CDC)
3
was hired as a communication consultant to help the Commu-
nication Ofce at the Jordanian Executive Privatization Commission. The CDC conducted
research to assess public perceptions of the Jordanian privatization program. Respondents
were asked to indicate their agreement or disagreement with the potential consequences
of privatization:
Creation of new job opportunities;
Upgrade and improvement of the quality of services;
Decrease in prices of the products and services of the privatized institutions due to
competition; and
Increase in productivity by employing the appropriate qualications in the appro-

priate places.
Table 2 shows the overall results of this research. The results are very interesting as they
indicate that Jordanians were more likely to agree that privatization contributes positively
in the area of jobs, quality of services, and productivity, while there was much more uncer-
tainty regarding the issue of tariff increases. The elaboration of the data by level of income,
education, and profession provided more accurate insights into stakeholder opinions and
offered more rened details to develop effective messages. These information were critical
in the development of the communication and outreach strategy associated with the
reform program.
Governmental and Political Risk Analysis
Public policies and development interventions cannot be effective without an under-
standing of the political environment. The communication-based assessment provides
details on political risk, transparency, communication capacity, institutional support,
human resources, and legal considerations.
3. Center for Development Communication, result of omnibus research, Jordan, 2001.
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The opposition of key political actors can affect the design and implementation of the
project. It is critical, therefore, to anticipate the risks that the reform or project presents to
the status quo for the political actors in the system. This is not only a matter of identifying
the key politicians, but also the degree of inuence they might exert over the project. The
analysis must be attached to the general perceptions of the government success in deliver-
ing services, administering programs, and achieving results. Furthermore, the develop-
ment initiative should identify and engage a political champion who could generates
favorable public opinion around the development initiative. Several initiatives have failed
to identify appropriate political champions, which in turn has led to public mistrust and
lack of credibility in the process.
Interestingly some legal frameworks may need to be changed prior the implementa-
tion of a project. This step becomes a bottleneck if there has been insufcient communi-
cation with internal governmental actors, such as the executive cabinet or parliament,
among other political leaders. It is interesting to analyze the political behavior of parlia-
ments faced with approving loans for projects. DevComm research indicates that about
80 percent of countries where the World Bank is active have parliaments that must approve
all World Bank initiatives. At the macro level, the communication-based assessment can
track the political tendency to support or oppose World Bank operations in the country.
Through a review of secondary sources and in-depth interviews of some key actors,
the communication-based assessment provides information about past experiences in sim-
ilar projects and the legacy these have generated among stakeholders. This analysis helps
the task manager obtain a more accurate idea of a governments pattern of dealing with
similar topics. Knowledge about prior communication experiences assists in the transfer
of knowledge to new governments, eliminating the need to start from ground zero. This
stage of analysis is crucial to understand public perceptions about particular issues. This
understanding is of particular importance in privatization projects, where past experiences
dene how upcoming projects are perceived.
In the 1990s in Senegal, a privatization program came to a halt because the there was no
consensus in favor of it at launch (Bhatia and Campbell-White 1998). Politicians, employees
of public enterprise, and the general public resisted the concept of privatization. In analyzing
Table 2. Public Perceptions of the Privatization Program in Jordan
Strongly Somewhat Somewhat Strongly
Statement agree agree Uncertain disagree disagree
Creating job opportunities 24.1% 28% 27.4% 13.7% 6.8%
Upgrading and improving 26.6% 36.3% 24.1% 8.2% 4.8%
the quality of services
Decrease in tariff of services 7.8% 13.8% 39.2% 25.9% 13.3%
of the privatized institutions
due to competition
Increase in productivity by 18.5% 23.9% 33.1% 15.5% 9.5%
employing the appropriate
qualications in the
appropriate places
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the communication aspect of this initiative, authors noted that there was no public announce-
ment of the policy; only weak efforts to involve stakeholders in the reform process; and feeble
attempts to address directly peoples concern about how privatization would alleviate poverty.
Hence, the outcomestrong resistance to privatizationwas hardly surprising.
Opposition to privatization and public-private partnership programs in infrastructure
often comes from the urban middle class who benets from existing subsidies. It is not
uncommon, for instance, that 3035 percent of connected users in urban water provision
services pay below the cost price for water. Since the urban middle class is an important
constituency for some politicians, they lobby to keep their tariffs low. Thus, political obstacles
to reform are often bound up in a socio-political contract between governments and
vocal, inuential middle-class constituents. An interesting discrepancy between willingness
to pay for water versus unwillingness to charge is found in many cases. Willingness to
pay studies conclude that poor consumers are willing to pay for quality, piped water, as
they often already pay more for non-networked water if they are not connected. However,
politicians are not willing to raise tariffs. Government reluctance to charge is based on
political pressures to keep tariffs articially low. Lack of political will to impose tariffs that
cover operation and maintenance costs can also be due to perverse incentives or patronage
as illustrated in a La Paz case study where political interference in concessionaire tariff
setting derailed a process that had been extending coverage to poorer parts of the city.
Box 7: Governmental and Political Analysis: Issues to be Covered by the
Communication-Based Assessment
Political risk of the reform, policy, or project
How cohesive is the cabinet? What are the political interests that could affect the normal imple-
mentation of the project/reform/policy?
What is the nature of the relations between the executive and the legislative branches? Are
there opposing views?
Who are the main political actors who should be persuaded/involved? Does the initiative have
a political champion? What do the audiences think about him/her?
What is the relevance of the initiative within the governments agenda? Can the initiative be
properly positioned within the key government institutions? Among key political actors?
Have there been any public statements of the opposition related to the initiative?
Has the project been discussed in a parliamentary commission? What has been the position of
the opposition? What actions have been undertaken to improve project positioning in the
parliament? Which laws need to be approved to move forward?
How much trust/popularity does the government have? What are the main causes? What level
of credibility does the implementation agency have?
What was the turnout during elections? How legitimate is the present government/cabinet
minister? How powerful is the counterpart minister internally? Is there a strong civil service (not
politically appointed) supporting the project?
Transparency in similar initiatives
What are the past experiences in communicating similar reforms, policy, or projects?
Which agency was in charge of implementation? Which were its main allies? Its main enemies?
How are they perceived at government/political level, externally?
Source: Chaman and Mitchell (2007).
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These concerns can inuence decisionmaking and actions by bureaucrats, who may
avoid unpopular policies, such as raising tariffs and enforcing collections, in order to retain
their positions. This is why utility managements and especially regulators should be legally
independent entities with at least some nancial independence.
Risk Analysis in Infrastructure Public-Private Partnerships Program
In some countries, the water service agencies and utilities are overstaffed, like many other
government agencies. Public sector unions then typically oppose reforms to protect the
jobs of their members. In this context, a major discussion point is the nancing arrange-
ments for the typically very substantial nancial burden of compensation for lay-offs.
Public institutions, such as schools, hospitals, or military bases are often exempted from
paying their water bills and politicians can be reluctant to abolish such exemptions on various
grounds. If the ministry of local government, for example, has the water utility enforce bill
collection from the ministry of energy, it can expect a similar treatment from the electricity
company. Therefore, public institutions sometimes make debt swaps between the water and
the electricity utility, for example, or the water utility and the telephone company.
On the positive side, political interests can also present opportunities for institutional
change. The motivation can be a desire to improve coverage and development outcomes, or
a realization that price increases can bring better quality services, which can give political
returns. Political drive can break the cycle of opposition to reform, unsettle institutions, and
bring about change. The Salta Province concession in Argentina provides a good example.
In Argentina, the Salta administration governs one of the poorest of Argentinas 22
provinces (Saltiel 2003). It was motivated to improve water service and coverage by pub-
lic health concerns. It used imaginative means in its role as the concession-granting author-
ity to change the institutional set up to make progress towards universal coverage. In
March 1996, water sector reform in Salta started after the provincial legislature delegated
to the provincial executive branch of government the power to dene the rules and proce-
dures to state water company concessions. Under the Argentine legal system, provinces
have the authority to delegate responsibilities for water and sewage service provision to
municipal authorities, yet neither the regulatory framework nor the concession contract
provided for the involvement of local governments. Undaunted, the provincial adminis-
tration developed a transaction strategy designed to build bridges between the municipal-
ities, user organizations, and the concessionaire.
Salta Province learned from the failures of mega-concessions in Latin America in the
1990s. As a result, coverage increased from 76 percent to 96 percent for water supply and
from 54 percent to 84 percent for sanitation, while the number of municipalities served by
the concessionaire was increased from 43 at the beginning of the concession to 56 in 2005.
The achievements made toward the objective of universal coverage are notable in part
because the concession took place in a poor province, and because it survived a major eco-
nomic crisis in the country.
Economic rent-seeking behavior can be a signicant factor in water supply and sani-
tation reforms globally. In an institutional context with low transparency, poor contract
enforcement, and weak accountability, large investments provide opportunities for top
slicing. Poorly monitored tariff streams can be diverted. Illegally connected customers can
pay utility staff to avoid being cut off. Approaching and working with incumbents in these
situations can be challenging, and some may actively block reform.
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The communication-based assessment provides key information to address these
issues at the project design level while the strategic communication program allows insti-
tution to engage stakeholders in dialog, while incorporating mechanisms for information
sharing and feedback on policymaking.
Stakeholder Analysis
Stakeholder analysis is a four-step process that provides a clear understanding of the nature,
attitudes, value, and interests of stakeholders (Rietbergen-McCracken and Narayan 1998).
Step I. Identify Key Stakeholders
The rst step of a stakeholder analysis is to identify the key stakeholders from among the
large array of institutions and individuals that could potentially affect or be affected by the
proposed privatization. Questions considered by communication specialists must include,
but not be limited to the following: What is the relative relationship among the stakeholders?
What is their opinion about privatization? What is the level of interaction among various
groups (for example, political parties, state-owned enterprise management, government,
and unions)?
Who are potential beneciaries of privatization?
Who might be adversely affected by privatization?
Have supporters and opponents of privatization been identied?
What are the relationships among the privatization stakeholders?

Step II. Assess Stakeholder Interests
Once the key stakeholder groups have been identied, it is crucial to consider their possible
interests in the project or privatization program. Some stakeholder interests are less obvious
than others and can be difcult to dene, especially if they are hidden, personal, multiple,
or in contradiction with the stated aims or objectives of the organization. Below are
questions that guide the inquiry into the interests of each key stakeholder or group. With
this background, consideration is given to how the project might affect these interests
positively or negatively.
What potential impact will privatization have on these interests?
What are the stakeholders expectations of the project?
What benets are there likely to be for the stakeholders?
What resources might stakeholders be able and willing to mobilize?
What stakeholder interests conict with project goals?

Step III. Assess Stakeholder Inuence and Importance
For each stakeholder group, it is necessary to assess their importance and inuence vis--vis
the political economy structure and vis--vis the privatization program. Issues to consider:
Relative power in the countrys political and economic decisionmaking process;
Degree of organization and institutionalization;

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Control of nancial resources;
Informal inuence such as personal connections and patronage networks;
Power relations with other stakeholders; and
Importance to the success of the privatization effort.

From a communication standpoint, it is crucial to recognize that inuence and relevance
are two separate concepts. Inuence refers to the power that stakeholders have over a
reform process, and it can be exercised by controlling the decisionmaking process directly
or by facilitating or hindering the projects implementation. This control may come from
a stakeholders status or power, or from informal connections with leaders.
Relevance, on the other hand, relates to the degree to which the achievement of the
projects objectives depends on the active involvement of a given stakeholder group. Stake-
holders who are relevant to the economic reform program are generally those whose interests
are actively promoted by the privatization program, as well as those whose interests converge
and/or overlap with the objectives of the project. Some stakeholders may have a potential
important role to an economic reform but may have very limited inuence on it if they are
not included in the decisionmaking process, and it is crucial that the communication
specialist be aware of this important distinction. These stakeholders may require special
communication efforts to enable them to become active participants to ensure that their
needs will indeed be met. Unions are a relevant example of this kind of stakeholder.
It is also important to emphasize that a stakeholder group is not monolithic, but
rather, it is composed of different sub-groups, all of which have their own values, interests,
and positions to be addressed through different communication activities and channels.
For an effective assessment, therefore, it is necessary to perform a certain degree of dis-
aggregation. The World Banks experience with Sri Lankas privatization program, for
instance, illustrated how analysis to uncover distinctions in trade unions attitudes toward
privatization was successful. Differences of opinion were found between union leaders and
members on one side and between rural and urban associates on the other. A thorough
investigation to reveal sub-group interests and attitudes is vital to project outcomes. For
some groups, opposition to privatization may be feasible and in their interest; while for
others, it may not be. A thorough understanding of the political and social contexts is a
prerequisite for devising a communication strategy to manage the process of change.
Step IV. Outline a Stakeholder Communication Strategy
Develop a strategic communication program for stakeholder engagement according to the
following elements:
Interests, importance, and inuence of each stakeholder group;
Particular efforts necessary to involve important stakeholders who lack inuence;

and
Appropriate forms of participation promoted in the public communication pro-

gram throughout the project cycle.
On the basis of the stakeholder analysis, some preliminary strategic communication
planning is conducted to explore how different stakeholder groups can be involved in
subsequent stages of the privatization, as summarized in Figure 4. As a rule of thumb,
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their levels of inuence and importance guide the appropriate approaches for incorporating
different stakeholders needs into the design of a public communication program:
Stakeholders of high inuence and high relevance should be closely involved

throughout the process to promote participation and ownership.
Stakeholders of high influence and low importance are not the objective of the
project, but may oppose the intervention; therefore, they will need, as appropriate,
to be kept informed, and their views acknowledged to avoid disruption or conict
and to mitigate political and social unrest.
Stakeholders of low inuence and high importance require special efforts to ensure
that their needs are met and their participation is meaningfully integrated in the
consensus building process.
Stakeholders of low influence and low importance are unlikely to be closely

involved in the project and require no special participation strategies (beyond any
information-sharing strategies aimed at the general public).
While bringing in a specialist to undertake a communication assessment is not required
for infrastructure projects, an increasing number of task team leaders are turning to these
experts, particularly to help them navigate the highly complicated political terrains in
which they operate. By their nature, infrastructure projects are highly sensitive in political
and social terms as they involve potentially controversial issues, such as a countrys strategic
resources, private sector participation, or privatization. A good communication assess-
ment can help identify and suggest measures for mitigating these risks. The West Africa
Gas Pipeline project provides a good example (see Box 8) of using a communication assess-
ment strategically to identify upstream political issues in a multi-country context and to
outline approaches for addressing them.
Assessment of Institutional Arrangements and Local Capacity
In order to design a comprehensive communication program, it is necessary to carry out
an assessment of institutional capacity for communication in the national, regional, and
Figure 4. Adressing Stakeholder Importance and Inuence
Source: Calabrese (2002).
Influence
I
m
p
o
r
t
a
n
c
e
High
High
Low
Build consensus for
reform
Mitigate risk of social and
political unrest
Promote participation and
ownership
Disseminate
information
Priorities to design a public
communication program
WP 139.qxd 2/29/08 6:24 PM Page 25
local governments, and in the country at large, including the private and non-prot sectors,
as well as research centers and universities.
This assessment will be the baseline to develop a communication infrastructure to better
manage and coordinate communication activities across different agencies. It will also
identify key ofcials and independent third parties who could become active communica-
tion coordinators. The assessment has didactic purposes, as well as outlining eventual
training and capacity-building needs. Finally, it claries the issue of ownership of the com-
munication program by addressing key questions: Who should be responsible for designing
the communication program? Who should be responsible for implementing it? What
should be the chain of command? Who will take political leadership of the reform process?
And what sources of funding are going to be used for the communication program?
The establishment of clear lines of responsibility sets the stage for effective, ongoing
monitoring and evaluation of the communication program. The appropriate institutional
Box 8: West Africa Gas Pipeline Project: How Communication Addresses Political Risks
A communication assessment was requested in the early stages of development of the West Africa
Gas Pipeline Project. A major regional infrastructure initiative aimed at improving the competitive-
ness of the energy sector in Ghana, Benin and Togo, the project supported the development of a gas
pipeline, which would bring gas from Nigeria to those three countries. The political complexities of
involvement by four countries, four separate governmental structures and four citizenries raised ags
early on. Despite the many expected positive outcomes, concerns were expressed early by different
stakeholders about possible negative impacts of the project on populations, the environment, and
the public nances of the countries involved.
In what has become a fairly ordinary phenomenon for World Bank, the project also exemplied
how local concerns about infrastructure projects nd their way into the international networks
of NGOs and acquire global relevance. Additionally some local NGOs and media echoed these
concerns, especially from Ghana and Nigeria. Within this context, the scope of communication
support was not limited to helping the governments and the project partners in the design and
the implementation of communication strategies and program, but also included assisting the
World Bank project team in developing its own strategy and leading a corporate dialog with
global stakeholders.
A communication-needs assessment was carried out to get a better understanding of the key issues
in each country and the positions of different stakeholders. Overall, results in both Ghana and Benin
showed the project garnered widespread public enthusiasm, while in Togo, the population showed
little interest, as they did not anticipate any concrete impact on their country. In Nigeria, on the other
hand, NGOs were strongly mobilizing against the project, trying to use it to improve the situation in
the Niger delta. Political leaders differed in the level and effectiveness of their public support for the
project. In Ghana, despite the Presidents personal support to the initiative, the Ministry of Energy
was blamed for not adequately involving the parliament or engaging the public at large. This led to
a broad perception of the limited overall involvement and ownership of project, which, according
to some interviewees, was driven by and would benet the private companies involved.
The communication assessment advised the Government of Ghana to take a more proactive stance
and speak for the project. Recommendations also included a more open and participatory
approach to the overall project communication. Additionally the Bank held several meetings with
international NGOs and devoted adequate time and resources to address concerns. The commu-
nication assessment advised the World Bank to take a back seat in terms of public discussion
and play a strong role as a facilitator of dialog at various levels.
Source: Development Communication Division Technical Assistance, Mitchell, P., Santi E. and Z.
Lichtenberg, The World Bank, 2005.
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basis for a communication endeavor is a key question to be addressed by the government.
World Bank experience has shown that a Communication Manager should be included in
the boards or secretariats of the privatization councils and on the boards of the privatizing
agencies. This is a key requirement for privatization managers to achieve better performance.
The Communication Manager has the overall responsibility for supervising the pub-
lic communication program and should meet regularly with key players in the govern-
ment, legislature, and civil society to discuss issues and policy-options. In this way, the
Communication Manager can ensure that key players views are being considered and
that messages and channels of communication are appropriately chosen and tested. A
Communication Unit should be able to establish close and cooperative working relations
with key ministers and public corporations, which should take on important communi-
cation roles themselves. To make a communication program work, it is critical that the
unit and the Communication Manager in particular, be free from bureaucratic obstacles,
which would hinder the timely ow of information within the government, among public
institutions, and within society at large.
When considering institutional bases for communication, it is also important to think
about the inclusion of independent forums for public discourse and debate on the issues.
In this regard, existing think tanks might serve as respected forums for debate, and they
should be worked into any action program of the communication strategy. As communi-
cation programs are envisioned and structured, there is the need to identify public or
private institutions and agencies that can speak on behalf of the government to build
support for the reform. Public condence depends on the credibility of the institutional
gatekeepers who convey the messages about the change taking place in the culture of public
institutions. A champion of the reform is very much needed so the public can identify itself
as being part of the process of reform.
In a comprehensive global public opinion analysis conducted in 20 countries by
Environics International Ltd. (2001), a research center based in Canada, most respondents
identied non-governmental organizations (NGOs) and religious organizations as being
the most trustworthy when it comes to protecting the best interests of society. Other
institutions such as unions, national governments, and multinational companies ranked
considerably lower. According to the study, trust in NGOs is highest among youth, the
well-educated, those with higher incomes, and urban people. Also, people who use the
Internet and those who are interested in other countries are especially inclined to trust
NGOs. Two-thirds of the respondents considered environmental and social advocacy
groups the most trustworthy. NGOs are ranked rst in four of the six regions surveyed.
Understanding and Involving Stakeholders
The World Banks experience with numerous initiatives in privatization, public-private
partnerships, and private participation in infrastructure programs, both successful and
unsuccessful, has produced some important lessons about stakeholders in a developing
country setting and about communication strategies that may be needed to reach them.
For example, creating public awareness of a governments reform rationale is very impor-
tant: people do not have to agree, but they must know why the government is privatizing.
Box 9 provides an example from power sector reform in India. Another stakeholder-related
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lesson is that privatization is not a panacea; it works best when it is accompanied by other
economic liberalization, including a regulatory framework that is enforced and made cred-
ible to the public and all other stakeholder groups concerned.
World Bank experiences with assessments carried out in numerous countries shows
that the main clusters of stakeholders in privatization can be described as follows:
Government, as the main stakeholder, is involved in all phases of the process from
policymaking through implementation.
Politicians are concerned with the success of privatization, both for their countrys
benets and for their own future careers.
The public-at-large is concerned about privatization to the degree to which it

affects public services. Thus, it tends to show little interest in the privatization of
manufacturing plants, but a lot of interest in the privatization of utilities, particu-
larly since state-owned utilities tend to be undercapitalized and poor providers of
services.
Employeesnot only those employed in the privatizing enterprise but also those
in other state enterprises and public institutionsare affected by any precedents
established, as are lower-level, mid-level, and senior-level civil servants.
Managers are concerned about takeovers by private and sometimes foreign com-
panies, as well as a change in their political power.
Consumers and the general public are interested in several aspects: Will tariffs
increase or decrease? Will service quality deteriorate? Will service coverage be
widened?
Media is concerned about social problems arising from joblessness, about the pos-
sibility of undue power being ceded to foreign investors, about the political rami-
cations of a given reform, and about consumers rights.
Investorsboth national and internationalare interested in opportunities to buy.

Box 9: Power Sector Reform in India: Multidimensional Political Risk
and Communication
The power sector reform in India is an interesting case of multiple reform risks associated with
highly conicting and multidimensional stakeholders interests, which made strategic communi-
cation an important tool of reform phasing and implementation. In the reform, there was a sig-
nicant gap among and between key stakeholders, a gap that was partially bridged by strategic
communication campaigns. The structural risk of reform fatigue was not solved by strategic com-
munication alone; however, it was signicantly reduced by the communication programs. At the
core of the communication programs, there was the necessity for the reform to demonstrate to
political constituencies of different states the link between reform and public benets. This was
absolutely necessary to partially aligning short-term interests (politicians) with long-term benets
(citizens), as well as to change perceptions among utility workers and managers. Citizens them-
selves were deeply skeptical of reforms effectiveness due high political interference in the utili-
ties and the risk of higher prices. Most importantly, strategic communication was used inside the
utilities to gain some support by public servants, who understandably feared for their jobs and
future professional development. Even inside the utilities, there were multidimensional and some-
times conicting interests among and between workers, management, and unions.
Source: Lal (2006).
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Consideration of such diverse potential stakeholders helps generate awareness of the need
to balance economic, political, and social concerns.
Labor Relations
The communication program has to include several elements in order to successfully
address concerns and interests of unionized and non-unionized workers. Trade union
leaders are generally among the most tenacious opponents of privatization, because state
employees are overly politicized and more prone to be politically mobilized than workers
employed in the private sector. Among mid-level and local-level trade unionists, there is a
tendency to quickly abandon political causes and focus on the needs of their co-workers,
thus sharing a mindset similar to that of state employees. In highly unionized sectors, the
main management task in privatization processes may be to reduce the inuence of the
unions, in order to assure that the privatization process can be implemented. Unions
generally respond to this confrontational approach by tightening their ties with those polit-
ical parties that can affect government decisions and eventually cause a shift in power.
Communication with labor is so important that virtually no privatization effort can
be effective without consultation with unions. Dialog with labor must take place early on
as the longer labor is ignored, the more likely the active resistance to privatization will be
established. Lack of timely information about the future may lead to anxiety, rumors, lack
of productivity, and, eventually, strikes and unrest. The privatization and monopoly break-up
of Italys huge state-owned energy company of the 1990s is an excellent example. The unions
opposed the privatization until the government decided to undertake a cabinet reshufing
by nominating a former leader of the communist party as Minister of Industry. The new
minister, who had close ties to the unions and some credibility with them, acted as a
mediator and communicator, and led the unions to accept most of the privatization.
One of the key elements of the success of the Italian privatization was the creation of
a communication-based mechanism for building trust, effective participation, consulta-
tion, and transparent decisionmaking. Efforts to explain the governments privatization
plans assured labor that their overall interests were fairly represented and that sacrices
would be balanced with redistributive measures, which allowed workers to reap some
benets of the privatization programs. This communication approach helped to reduce
tensions and greatly improved the chances for constructive dialog and negotiations among
different interests. For instance, the internal communication program within state-owned
enterprises was designed to create an enabling environment to build support for the reform
among union members (Bortoli, Fantini, and Siniscalco 1999). It also helped anticipate
issues likely to arise between management and labor as a new private-sector, efciency-
oriented environment was being introduced.
Labor tensions can be reduced signicantly when governments understand and rec-
ognize the constructive role that labor plays and make efforts to communicate with unions
and workers about privatization. A Spanish privatization law, approved in 1999, is a very
interesting example of the institutionalization of the process of consultation. The law sets
out a number of communication-related obligations on the part of the public agencies
preparing to privatize. These specify, for example, that information must be provided to
workers representatives who must also be consulted prior to the transfer. The law also
grants workers the rights to be informed about the business of the employer, its general
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economic and nancial situation, its position on production and sales, the future prospects
for employment and the types of employment.
Although there is a signicant body of knowledge on privatization-related labor issues,
the World Bank and the International Labor Organizations experiences have shown that
early consultation with labor plays a decisive and positive role in the process of design and
implementation of public communication programs (Van der Hoeven and Sziraczki
1997). What follows and the example in Box 10, illustrate the value of consultative
processes, information dissemination programs and strategic communication activities.
Specically they are intended to:
Explain the rationale, costs, and benets of privatizing and the costs of not doing
so. In countries such as Argentina and Uganda, workers supported privatization
when they understoodmainly through the governments communication
effortsthat privatization was necessary to obtain capital for new investments, to
improve access to services, and to prevent possible closure and loss of even more
jobs that could result from failure to privatize.
Enhance labors understanding of the timing and method of privatization. In many

cases, labor unions recognize that the time for change has come, but their opposi-
tion stems from lack of information, consultation, and participation in the gov-
ernments plans for privatization.
Describe the incentives and social safety-net measures to be put in place. Often, the
lack of information about severance policies and supporting measures has created
uncertainty for workers and has increased their opposition to reform. Particularly
in economies with little experience with share ownership and weak capital markets,
employee share ownership programs require a comprehensive information program
to educate employees on the meaning and benefits of share ownership. Such a
program needs to explain concepts, such as property rights, shares as an alternative
Box 10: Employment Guarantees: The Case of Private Participation in the
Hungarian Energy Sector
In the case of energy sector privatization in Hungary in 199496, unions were involved as partners
in the private sector participation process, resulting in an agreement to protect jobs and provide
benets as part of the private sector participation contract. The agreements importance was
apparent a year later when the international private companies that had bought the Hungarian
energy state-owned enterprise fell into dispute with the Hungarian government over the extent
to which they should be allowed to raise prices and, thereby, maintain prot margins.
The international companies resorted to trying to reduce labor costs as a way of keeping their
prot margins up and side-stepping their conict with the government. They were prevented from
doing so by trade union action to enforce the commitments made in the original private sector
participation contract.
This Hungarian case is instructive in showing that when a process of inclusive consensus building
takes place in the lead-up to such agreements, the agreements acquire added durability. The
Hungarian government had consulted with trade unions before and during the private sector
participation of the energy sector. As a result, clear protections for employees were built into the
contracts from the outset.
Source: ILO (2001).
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to bank deposits, differences between interest and dividends, impact of retained
earnings and ination, etc.
Publicize regulations and other measures to protect consumer and labor interests.
Often, labor unions are concerned not only about job preservation, but also about
the broader social impacts of privatization. The more governments explain their
plans in these areas, the greater the chances of gaining labor support.
In countries with strong labor unions, some governments have given unions a direct role
in the implementation of the national privatization program. In the Buenos Aires water
concession, for example, the union was represented on the committee that was set up to
oversee the process and was closely involved in negotiations on restructuring methods,
severance options, and retraining arrangements.
Similarly, in the restructuring and privatization of Congos railway company (Regifer-
cam), the government and the company management involved the union and labor ministry
representatives in developing their restructuring plans. These efforts led to an agreement
on options for a retrenchment program involving about 1,600 staff.
Experiences in Nepal (see Box 11) and South Africa also show the benets of
worker/union stakeholder inclusion in the communication plan. In South Africa, given the
Box 11: Winning Workers Trust: The Case of the Nepalese Tea Pickers
Roughly 2,000 people worked for the government-owned Nepal Tea Development Corporation on
eight plantations in eastern Nepal. National trade unions were vehemently opposed to private
sector participation. Local trade unions were said to be wholly controlled by the politically parti-
san union bosses. Tea workers were thought to be fearful, but nobody bothered to ask them. Infor-
mal, quiet discussions with workers and some helpful mid-level managers proved otherwise. Good
communication materials were needed to reach people who had no television, few radios, and
near total illiteracy. Their lack of access to the broadcast media suggested that they probably
enjoyed movies, so a video documentary was produced on a successfully privatized paper mill
elsewhere in Nepal.
The footage was lmed in the Nepali language without a script. Paper mill workers, from sweepers
to technicians and mid-level managers, were asked to describe the private sector participation
process and how they felt, from rst warning to the present, when the company was growing and
making prots. Because there was no script, the respondents spoke candidly and in their own
words, carrying their conviction of total honesty. I was afraid at rst, said one man, aged 40,
but I used to walk to work, and now I drive in my own car. He explained how private sector par-
ticipation meant fast promotions for people like him who worked hard and had good ideas. A
woman explained how private management was so much more receptive to new ideas. A man-
ager explained how profitability allowed him to hire more than a thousand poor women who
otherwise had no jobs.
The documentary became the focal point of a face-to-face communication campaign reaching
90 percent of the tea workers. Representatives from the Nepal Ministry of Finance met with all of them
in groups of 50 to 200, showing the documentary, giving them specially prepared brochures describ-
ing the likely benets forthcoming and, most importantly, answering their questions. The workers
ended up eagerly supporting the private sector participation. It turned out they disapproved of the
performance of many of the state managers, and took pride over their own role in preserving tea
estates that they felt were under-funded by the government agency that had been managing them.
Even the local union representatives helped gather workers for the meetings, since their allegiance
was to their friends and neighbors rather than to a distant and politicized leadership.
Source: Adam Smith Institute (2000).
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pivotal political role of the unions, consultations took place at a very early stage as part of
the national framework agreement on the restructuring of state assets. Unions were
involved in the initial decisions on privatization and had a seat at the table for all discus-
sions on privatization at all stages of the process. Also, training and consulting support
was provided to educate unions about the objectives of privatization and to help them
participate constructively in the process.
Civil Servants
In some countries, state-owned enterprise employees are civil servants. Privatization for
them can mean a signicant professional opportunity, but also a huge paradigm shift as
they lose their status as civil servants and must sign new employment contracts. Moreover,
these civil servants rarely have an inclination for, training in, or experience with commer-
cial matters. Civil servants, therefore, fear loss of power and prestige, as well as loss of
legaland occasionally illegalbenets.
Civil servants share the concerns of their colleagues in the state-owned enterprises, and
they do not support privatization because they fear being identified as supporters of a
losing issue. They, in fact, could be losing face among their peers and thus sacricing
opportunities for self-advancement. Such concerns need to be allayed with efforts to build
condence in the potential for the success and necessity of the privatization, as well as in
the impossibility of a government retreat from the privatization policy.
Strategic communication activities should, therefore, concentrate on dissemination
of information and space for two-way dialog within the line ministries and across the
spectrum of public institutions. These are critical measures for alleviating civil servants
concerns about job security, potential redundancy benets, retraining options, nding
other jobs, and opportunities for retirement.
Journalists and the Media
A key factor for the success of a communication effort is journalists involvement and interest
in economic issues. Any attempt to promote dialog and build public support about the
merits of privatization will be futile if journalists covering the issue are pursuing their own
agendas, rather than promoting the interest of transparency and public accountability.
In order to allow journalists to take an informed look at privatization and to develop
a deeper understanding of its mechanisms, it is necessary to remind them about the leading
role that media play in the society as the watchdog of democracy, the platform for account-
ability in politics, and as a catalyst for overall advancement of well-being in the society as
a whole. In this respect, and particularly in developing countries, engaging in dialog
directly with the media through nationwide training-like programs on economic issues can
be a key element of a communication program.
The World Bank Institute has organized such a training program for journalists in
several African countries to assist them with basic tools to understand the complex eco-
nomic issues associated with privatization. This training was not designed to directly
promote the governments privatization program, individual transactions, or any World
Bank-nanced projects. Experience has shown that such training is more credible and
effective if organized by a well-established academic institution and designed in a format
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that takes into account the practical needs of the journalistic profession, combining the
teaching of some economic theory with concrete suggestions on how to become a better
journalist.
Media workshops held early can help journalists to understand the technical, nancial,
economic, social, and political issues and the need for reform. An example of this approach
in Tanzania is illustrated in Box 12. Study tours for journalists have been used successfully
on a number of occasions, including one by the Government of Cape Verde as part of its
Lets Modernize Cape Verde campaign, which included trips for journalists to other
Africa countries undergoing infrastructure reforms (Bhatia and Campbell-White).
Private Investors
Communication research and analysis tools help decisionmakers understand how poten-
tial investors perceive market investment opportunities and dene priorities. One of the
most common results of opinion research conducted for privatization programs is the
request from constituencies that reforms adhere to the processes of open participation
and transparent review by all interested parties. Stakeholders prefer open-market bidding
to determine sale prices in order to reduce instances of corruption. They voice their con-
cerns that contracts be awarded in strict adherence to evaluation criteria announced at
project outset.
The more stability and credibility that governments instill in the privatization process,
the more condence that investors will have to participatea critical element of success.
Even if a government gets all policies, rules, and procedures right, operators will invest only
Box 12: Working with the News Media: Goats, Corruption and the Press in Tanzania
Tanzania has recently seen a more liberalized media after a long history of propagandistic state-
owned newspapers and radio. Private sector participation, however, was savaged in the press due
to a lack of professional reporting skills, a misunderstanding of economics, and the widespread
practice in which reporters were paid bribes in exchange for favorable stories.
The private sector participation program for a nancial institution was particularly criticized in the
newspapers, chiey because several major newspaper owners had defaulted on bank loans, and
they feared that private-sector buyers would try to collect the debts. The Tanzanian private sector
participation agency started changing the relationship between the media and the government by
instituting an open door policy for reporters, welcoming all of them at any time of day, and
answering questions as quickly and accurately as possible. This provoked curiosity and support from
a press corps accustomed to its governments closed doors and refusal to communicate.
Seminars were scheduled and conducted by two prominent BBC journalists with nearly 20 Tanzanian
journalists identied as being the most professional in their eld. Rather than approaching the topic
of private sector participation directly, opinion research among journalists had suggested that the
problem of private sector participation should be approached through the larger issue of journalistic
professionalism, and the desire of local reporters to improve their performance.
The rst seminar focused on reporting ethics and professional practices, but used private sector
participation issues in the object lessons and exercises. Local participants explained that, generally,
bribery should be frowned upon by journalists, unless the bribe was a goat, which is a traditional
gift and hence not a bribe. A later seminar explored international standards on reporting business
and economic stories.
Source: Adam Smith Institute (2000).
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if they trust the government to stand by its plans and commitments in the short and long
term. Communication specialists can help governments take a variety of steps to create and
convey credibility and stability.
To reduce perceptions of risk, public communication programs can reassure investors
by providing specic information on the political economy of the country, key regulations,
and taxation or tariffs pertaining to licenses and terms of contracts. In the case of Nigerias
national water utility reform, the involvement of the private sector preceded the restruc-
turing. The communication program made a concerted effort to explain to potential
investors the rationale behind the restructuring in advance of actual transactions, offering
information on taxation, subsidies, regulations, etc., pertaining to the private sector par-
ticipation program. This helped build investor condence in the government commitment
to reform the water sector.
General Public
World Bank research shows that better development outcomes correlate with improved voice
and participation (World Bank 2005). A key result of good communication practice is to
enhance voice and participation for citizens, particularly the poor, who are often excluded
from development processes that impact them. Strategic communication establishes channels
of dialog between governments and affected parties, as well as among stakeholders at large. An
example of strategic participation in infrastructure reform follows in Box 13. Providing infor-
mation is essential to address the needs of the poor, however, creating opportunities to voice
their concerns is of equal importance. This communication partnership helps to design devel-
opment projects responsive to the needs of the poor and the public-at-large.
Management
A strategic communication plan for privatization, public-private partnership programs,
and private participation in infrastructure must consider the managers of state-owned
Box 13: Stakeholder Participation in Rural Electrication in the Philippines
In order to achieve its objectives of extending electric power to the poor and increasing rural elec-
trication, the Government of the Philippines passed the EPIRA (Electric Power Industry Reform
Act) Law in July 2002, which outlined broad strategies for reforming the power sector and included
provisions requiring that stakeholders be consulted about proposed reforms. With the support of
the World Bank, and in response to EPIRA requirements, the Philippines Department of Energy
launched a broad-based program of sector reforms and programs to achieve 100 percent electri-
cation of barangays (villages) by the year 2006.
One of the initial activities of the World Bank-funded projects was a program of stakeholder con-
sultation and development of a communication strategy. There were 23 participants from 21 Luzon,
Visayas, and Mindanao groups involved in the consultations. They were either rural development
professionals or end-users of electric power in rural areas. The consultations yielded a proposal to
hold a National Communication Planning Workshop to develop, in a participatory manner, a com-
munication strategy in support of the countrys rural electrication program, including the planned
introduction of private participation in the National Power Corporation.
Source: Development Communication Division operational support. The World Bank.
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enterprises as potentially powerful stakeholders in the reform process. These managers can
be motivated by self-interest as they try to maintain their positions of power, inuence,
and prestige. If their jobs are to be opened to international competitive bidding, they can be
concerned about their possible replacement and/or anking by private sector counterparts
and/or foreigners. Senior and mid-level managers, therefore, often lobby politicians to
retain the monopoly of these enterprises in exchange for political support. A communication
strategy geared toward the managers could focus on the professional benets stemming
from a more competitive workplace and market environment and from the growth potential
in the private sector once privatization takes place.
Civil Society Organizations
Civil society organizations (CSOs) are very involved in many privatization and public pri-
vate partnership programs in infrastructure. For instance, the water as a human right
debate, an integral part of water supply and sanitation private sector participation pro-
grams, has motivated advocacy CSOs in many countries, including Ghana (Box 14),
Bolivia, and elsewhere. CSOs, being part of societyboth local and globalnaturally have
their own internal tensions. Shifting alliances are seen commonly, for example, between
CSOs and global public sector unions, the social justice movement, former service delivery
NGOs turning to advocacy (for example, WaterAid, Oxfam, and so forth), and local
consumers associations.
In some cases, and ironically in the eyes of pro-reformers, the interests of rent-seeking
stakeholders can coincide with the actions of civil society groups against reform. In India,
Bolivia, and in other cases, civil society has opposed tariff increases, drastic staff reductions,
and exclusion of the poor and has criticized the assumed high prot for the private sector.
A lot of the criticism was aimed directly at the World Bank, which was seen as forcing
privatization.
Public perception for the reform design, implementation, and evaluation is important.
Lessons from two decades of infrastructure reform identied public perception as a par-
ticular political economy challenge (World Bank 2006). Perceptions are not only based on
empirical evidence, but also on the way reform issues are debated, decided, implemented,
and evaluated. This challenge calls for public debates of reform options through which
institutions not only consult, but also actively engage civil society, ideally at the early design
stage of reform. During the decisionmaking process, public perceptions and concerns
should be addressed systematically so that civil society engages in the design, implementa-
tion, and sustainability of reforms.
Objective of a Communication Program
After communication specialists have made a thorough effort to consider all key stake-
holders and have completed a communication-based assessment, they are ready to
approach the next phase of a communication programstrategy design according to com-
munication objectives. The communication objectives outlined in this section are usually
present in any privatization program; however, in particular cases, some of them may not
apply. Once identied for use in a specic privatization initiative, project managers and
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communication experts harmonize and integrate these broad objectives with the results of
the communication-based assessment to design the privatizations communication strategy.
This strategic communication process, which is usually undertaken during project
appraisal phase, requires identication of the programs objectives based on the research
and analysis conducted so far. The assessment will have collected and evaluated an array
of information about key stakeholders, communication channels, prevailing attitudes,
opinions, and a wide range of potential stakeholders. With this information, a list of objec-
tives has to be developed and used to design a feasible communication strategy. The com-
bined team of communication manager, staff, and local consultants responsible for design
and implementation of the communication strategy should review the following potential
Box 14: Civil Society Organizations in the Water Sector Reform in Ghana
In 1995 the Government of Ghana began stakeholder consultations to examine options for reform-
ing the countrys urban water supply sector. Poor nancial and commercial performance meant
that the sector was unable to generate enough revenues to sustain it. Only 51 percent of the urban
population had access to improved water supply. The most pressing problems were a lack of entre-
preneurship in management, high levels of non-revenue water, poor billing collection, and weak
nancial management. Starting in 1998, the government undertook broad stakeholder consulta-
tions that included CSOs, donors, the Ghana Water Company and civil society. The outcome was a
recommendation that a private sector participation (PSP) option should be examined for the urban
water sector. Eventually a management contract was considered.
Given the long period it took to get the management contract to bid, the government saw com-
munication as an important component of implementation, and hence a communications strategy
was developed based on solid research. A household survey showed that consumers were more
concerned about water availability (41 percent) and water quality (32 percent) than price (5 percent).
Eighty-one percent responded that unreliable water availability was the biggest problem with their
water supply. The majority of respondents, 86 percent, felt that both local and international private
sector participation benets Ghana, and 81 percent anticipated positive impacts as a consequence
of PSP in Ghanas water sector. However, 33 percent of the respondents considered the government
to be the most trusted party to manage and operate water delivery systems. The government was
aware of the challenge to broaden the PSP debate and communicate key decisions to its citizens,
as well as to the active NGO community in the country. Negative media coverage both domestically
and internationally, and vocal opposition from civil society groups, highlighted concerns about
proteering of the private sector and access for the poor.
Consequently the Ghana Water Project then launched a Public Education and Communication
Program. A Water Communications Committee, made up of managers of various water-related
entities, was established to coordinate and ensure a consist message. The program consisted of
three parts: community rallies for Resident Associations; tailored workshops and presentations to
media, members of parliament, NGOs, womens groups, labor unions and religious interests;
production and dissemination of TV documentaries and radio talk shows. A public debate ensued
between the NGO-sponsored National Coalition Against Water Privatization and a pro-PSP
coalition inclusive of resident associations, professional associations, and individual citizens. The
latter marched in the street urging the government to speed up implementation of the PSP. A
management contract was signed in November 2005 with a consortium of private companies to
manage the countrys largest 84 urban water systems. Citizen concern continues to encourage
transparency and public oversight of the contract to ensure quality of service. Communications
is now the responsibility of the consortium. It remains to be seen if they have the capacity to
manage the communications challenges they continue to face.
Sources: Chaman and Osborne-Miller (2005); Ghana Water Restructuring Project: Public Opinion
Poll Findings, PowerPoint presentation, The World Bank, June 2004; Communications Strategy for
the Ghana Urban Water Project2005, Communications Strategy, The World Bank.
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objectives, which are reasonably common in a variety of environments and contexts. This list
is a set of key objectives to consider when designing a communication strategy for privatiza-
tion, public-private partnership programs, and private participation in infrastructure.
Share a vision by stressing national over individual interests for the country that would
inspire condence in the government and its ability to lead by redening the role of the state.
Promote collective responsibilities and opportunities in reforming the society, and build a
base for a systematic dialog. Convey how the privatization reaches toward the vision. This
mission provides stakeholders with the tools necessary to make the vision a reality. The
vision for privatization is the way stakeholders want things to be, not the way they are now.
This is the primary source of inspiration to the implementers of privatization.
Build public understanding and national consensus on the need for and benefits of
privatization in the broader context of economic reforms, including labor market reforms,
nancial reforms and budgetary reforms. This understanding can be achieved via systematic
public information and education through the media, as well as dialog with key stake-
holders. A comprehensive campaign of public information and education would raise the
awareness of priority issues and develop a more positive public image for reform. The cam-
paign would address public opinion in general, as well as specic stakeholders, such as the
legislature, civil servants, the media, and the private sector.
Show progress towards this vision in an ongoing, systematic way. Short-term achieve-
ments, whether quantiable or not, should be brought to public attention to sustain con-
dence in the governments commitment and ability to deliver. Credible government
ofcials should routinely hold open meetings with public groups to ask their feedback on
proposed measures and to explain their importance in the context of the broader vision.
Improve the public image of government institutions and instill a customer focus
in government, from efficient service-delivery to accountability and transparency in
governance.
Promote dynamic leadership within government to communicate privatization. Lack of
energetic political leadership is perceived to be one of the major causes of delays on economic
reforms. This lack of government leadership creates difculty in attracting people to a new
vision for the country. A communication program motivates people to take on leadership and
creates cohesion. Communication specialists can help prepare government spokespersons
for public appearances, such as press interviews, speeches, and public seminars on reform.
This can include coaching and media training if necessary, as well as preparing brieng notes,
question-and-answers, and talking points. To be convincing, arguments in support of gov-
ernment policy should have the support of non-government allies and championsin the
business community, academia, press, entertainment industry, or through the establishment
of an independent policy institute. Such allies must be willing to speak on behalf of, or in
neutral terms about, the economic programs that the government undertakes. The idea is
not to co-opt, but to nd people who are genuinely willing to write or speak in favor of
proposed measures to reform the system. Coordination of communication among units of
government is critical to ensure a unied government voice on the issues. This forms the basis
for credible and consistent messages to the public.
Provide guidance, technical support and coordination on communication related to the
reform program across government. Also, ensure a consistent ow of information between
government agencies and the legislature, with the media, with civil society, and with the
outside world.
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Build a legislative support base for privatization transactions. To achieve timely passage
of legislation on privatization, it is necessary that the government identifies legislative
supporters for individual transactions, and that they be nurtured in a systematic and con-
sistent manner. Communication mechanisms have to be put in place early on, so that key
members of the legislature are fully briefed on upcoming proposals through institutional
channels and are aware of the benets of passage and the costs of inaction. Legislators
should be encouraged to develop a stake in the success of privatization.
Increase public education and information on economic reform issues facing the country,
including, for example, budget decits, unemployment, productivity and growth, and public
sector role in an open economy. This will help the public understand the larger economic
rationale behind reforms and frame individual reform efforts in their broader context.
Promote coordinated private sector involvement in policymaking, implementation, and
communication on privatization. In an economy that is largely based on the private sector
and that has to count on its massive involvement for successful reforms, it is imperative
that a constructive and well-coordinated dialog be established between the government
and private-sector groups, on both the national and international levels. The government
should identify leading private-sector groups that are willing to engage in constructive pro-
posals in the interest of their group.
The widespread practice of muddling through by securing personal interests with
individual private-public bargains should be preempted. Instead, incentives could be
created for members of interest groups to bring to the governments attention to those pro-
posals that have generated consensus within the given group. Each group should be made
aware of its role and responsibility to advance government action through constructive
proposals, instead of simply waiting for the government to act.
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CHAPTER 4
Conclusion
T
he use of strategic communication tools and techniques helps citizens to better
understand their governments visions in implementing reforms. Over the last few
years, the strategic communication approach has played an increasingly important
role in minimizing the political, cultural, and social risks inherent in the development
process. This approach is particularly critical in development programs where increasing
the level of awareness about a development issue does not automatically produce the
necessary sustainable changes in public perceptions or behaviors for the success of a
reform or project.
Information dissemination and mere knowledge alone cannot produce behavior
change. Numerous development initiatives in a range of sectors (for example, in the use of
water, payment for services, and tariff increases) illustrate this challenge. Going beyond the
transmission of information to achieve a change in practices and behaviors requires a reality
check between the priorities identified in the technical and economic analysis and the
concerns that relate to non-technical and non-nancial analysis. Often, reforms are viewed
from the standpoint of the implementing agencies, and not from the point of view of the
people whose lives are directly affected by the reform. Strategic communication techniques
can inform and encourage policymakers to base their decisions on a clear understanding
of beneciaries perspectives from the beginning of a development initiative.
39
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WP 139.qxd 2/29/08 6:24 PM Page 44
THE WORLD BANK
1818 H Street, NW
Washington, DC 20433 USA
Telephone: 202 473-1000
Internet: www.worldbank.org
E-mail: feedback@worldbank.org
THE WORLD BANK
Daniele Calabrese
for Privatization, Public-
Private Partnerships, and
Private Participation in
Infrastructure Projects
Strategic Communication for Privatization, Public-Private
Partnerships, and Private Participation in Infrastructure Projects is
part of the World Bank Working Paper series. These papers are
published to communicate the results of the Banks ongoing
research and to stimulate public discussion.
This publication is the eighth in a series of Working Papers
sponsored by the Development Communication Division
(DevComm) of the World Banks External Affairs Vice-Presidency.
This series is designed to share innovations and lessons learned in
the application of strategic communication in development
projects. Together with other donors, NGOs, and private sector
partners, DevComm seeks to mainstream the discipline of
development communication in development practice.
This paper reviews the experiences of the World Bank and its
clients in employing public communication programs during the
processes of privatization and private sector participation. Drawing
from academic and policy research as well as from case studies, it
highlights good practices and identifies lessons learned through an
examination of successes and failures. This book recommends
principles of strategic communication and offers a methodology for
researching and analyzing the communication issues associated
with privatization and private sector participation. It includes an
operational approach to design and implementation of public
communication programs for the various forms of privatization and
public-private initiatives.
World Bank Working Papers are available individually or on
standing order. These are also available online through the World
Bank e-Library (www.worldbank.org/elibrary).
DevComm
ISBN 978-0-8213-7499-0
SKU 17499

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THE WORLD BANK

Preservation of national economic sovereignty or independence;

Desire to retain control over certain activities or interests;

Concern that wealth might become concentrated in the hands of a few;

Distrust of all or certain segments of private sector and capital;

Protection of bureaucratic and vested interests;

Labor unrest resulting from job losses; and

Rising tariffs and costs.

Creation of new job opportunities;

Upgrade and improvement of the quality of services;

Increase in productivity by employing the appropriate qualications in the appro-

Who are potential beneciaries of privatization?

Who might be adversely affected by privatization?

Have supporters and opponents of privatization been identied?

What are the relationships among the privatization stakeholders?

What potential impact will privatization have on these interests?

What are the stakeholders expectations of the project?

What benets are there likely to be for the stakeholders?

What resources might stakeholders be able and willing to mobilize?

What stakeholder interests conict with project goals?

Relative power in the countrys political and economic decisionmaking process;

Degree of organization and institutionalization;

Control of nancial resources;

Informal inuence such as personal connections and patronage networks;

Power relations with other stakeholders; and

Importance to the success of the privatization effort.

Interests, importance, and inuence of each stakeholder group;

Particular efforts necessary to involve important stakeholders who lack inuence;

Appropriate forms of participation promoted in the public communication pro-

Stakeholders of high inuence and high relevance should be closely involved

Stakeholders of low influence and low importance are unlikely to be closely

The public-at-large is concerned about privatization to the degree to which it

Investorsboth national and internationalare interested in opportunities to buy.

Enhance labors understanding of the timing and method of privatization. In many

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